The recovery of the UAE real estate market from the COVID-19 pandemic will take at least 12 to 24 months, according to Dubai developer DAMAC Properties’ chairman Hussain Sajwani. His firm reported a net loss of 190 million dirhams ($51.7 million) for Q1 2021, compared with 109 million dirhams a year ago.
Losses were mainly due to lower revenue recognition as many projects are nearing completion, compressed gross margins due to revenue-mix and higher selling and general administration expenses resulting from higher booked sales reported during the quarter, the developer said in a bourse filing.
“The market is slowly recovering from the effects of the COVID-19 pandemic and its impact on various industries, particularly travel and tourism. I still strongly believe that recovery will take at least 12-24 months,” Sajwani said.
DAMAC, which owns the Middle East’s only Trump-branded golf course, reported revenue of 642 million dirhams as it booked sales of 1.1 billion dirhams and deliveries of approximately 1,350 units in Dubai.
The pandemic has added further pressure on Dubai’s over-supplied property market. However, there has been an uptick in buying interest in recent weeks as investors looked to take advantage of the lower prices for new developments.
"With the UAE government’s excellent handling of the pandemic and EXPO 2020 coming up, these are all positive indicators which make me cautiously optimistic. However, we must remain patient and guarded going forward as the global economy is still reeling from the effects of the pandemic and will take time until markets fully rebound,” Sajwani added.
DAMAC’s rival, Emaar Properties, last week reported an 8 percent year-on-year rise in Q1 net profit grew to 657 million dirhams.
(Writing by Brinda Darasha; editing Seban Scaria)
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2021